by Bryce Edwards

01 December 2010

Review of New Zealand politics in 2009

The year 2009 was a hectic one in New Zealand politics, partly because it was the first year of the new National Party Government’s term in office. At a general election in November of the previous year, National had ousted the Labour Party from its three-term tenure in office and formed a single-party minority government with support agreements with the Act Party, the Maori Party and United Future – all of whom gained ministerial roles outside the cabinet. In this first year, the new administration was both ideologically centrist and highly popular, being challenged only on difficult issues relating to the economic recession, political finance controversies over MPs’ expenses and various race relations questions. The following blog post examines these issues via a ‘Review of New Zealand politics in 2009’ which has just been published as a peer-reviewed journal article in the top political science periodical, the European Journal of Political Research (in the December 2010 edition). As well as looking at how the National Government fared in 2009, it also briefly analyses the main issues in politics (such as the economy, social issues, political finance scandals) and the changes in the other parliamentary political parties. [Read more below]

The National government

The National Party consistently recorded opinion poll support at least 10 percentage points above the 45 per cent won at the election in the previous year. This put the party between 20 and 30 points ahead of the opposition Labour Party throughout the year. Surprisingly, these astonishing high ratings were achieved during New Zealand’s worst economic recession in sixty years. The explanation for the National Government’s success was its strongly centrist orientation. National had won the election on an extraordinarily moderate and middle-of-the-road election platform (Edwards 2009), and once in office the party keenly felt the lack of enthusiasm among the electorate for any radical shifts in policy. Hence National retained nearly all the major social and economic policies of the former Labour Government, mostly only tinkering at the edges rather than making wholesale changes.

The political character of the government’s first year in office thus proved to be conformist rather than reformist. Although National was more business friendly than Labour, it was determined to be seen as a centrist, pragmatic centre-right government. In particular, the National Party leader and Prime Minister, John Key, was no ideologue. Instead he showed a strong instinct for assessing what was politically acceptable, striving to keep National as close to the median voter as his more ideologically driven colleagues would allow. Thus nearly all the government’s decisions in 2009 were guided by compromise and pragmatism, and National studiously avoided doing anything that might have polarised the electorate or visibly produced winners and losers. Part of the political strategy appeared also to be about stockpiling its political capital in this first year of office. The previous two National governments had both entered office during recessions – in 1975 and 1990 – and suffered from introducing austere economic changes too soon.

John Key was a dominant force in politics, and by the end of the year numerous political observers pronounced him to be the ‘politician of the year’. Such judgements certainly corresponded with voters’ views – opinion polls throughout the year recorded Key as being the preferred prime minister by a substantial margin. The new prime minister had little prior experience in politics before obtaining the top job in the country. He had only been an MP since 2002, the leader of his party only since late 2006, and he had no experience of being in government. Yet Key took to the prime ministerial role with apparent ease and skill. Displaying a down-to-earth type of showmanship and a sunny temperament, he operated with a chairman-of-the-board style, with a ‘whatever-works’ approach to policy. He appeared to particularly relish being on the world stage when possible, travelling in 2009 to China and the United States, where he had lunch with President Barack Obama and even appeared briefly on the popular American entertainment show, Letterman [pictured on the right]. He also participated in the Copenhagen climate change summit at late notice, having previously dismissed the meeting as a mere ‘photo opportunity’.

Key had been the National Party’s biggest advantage in contesting the 2008 election and he remained the ‘key’ to the National Government’s ability to increase its popularity in 2009. However, it was Finance Minister and Deputy Prime Minister Bill English who drove much of the government’s workload, especially in response to the economic recession. English was a strong performer, but his reputation was badly burnt by an expenses scandal (more of which later). Alongside Key and English, other high performing government ministers included Justice Minister Simon Power, Police Minister Judith Collins, Health Minister Tony Ryall and Transport Minister Steven Joyce. Joyce, in particular, was the quietly rising star of 2009. Despite being an almost unknown quantity prior to 2008 when he was first elected to Parliament, he had gone straight into the cabinet where he quickly become an influential figure, and was trusted by the prime minister as an extreme pragmatist, a safe pair of hands and a very able political strategist.

Issues in national politics

The economy

During the first part of the year, National’s focus on the recession overshadowed all other issues. The government had inherited an economy suffering under the cloud of the global financial crisis, unemployment was on the rise (reaching 168,000, or 7.3 per cent, by the end of the year) and bleak government accounts threatened New Zealand’s international credit rating. Typical of National’s centrist approach, in economic matters the new government choose to lurch neither left nor right. Instead of reform, the government attempted to weather the economic storm without needing to resort to reflationary or austerity measures. A job summit was held in February involving business, unions and the government. Out of this came proposals for a nine-day working fortnight and a national cycleway, but neither of these ideas progressed very far during 2009.

The government’s first budget in May was cautious, but warmly received. Most notably it included a deferment of a planned second installment of tax cuts, and a freeze on payments into the superannuation fund that had been established in 2001 to partially pre-fund the future cost of New Zealand pensions. The government also announced a sinking lid on public spending whereby any increases in expenditure would have to be offset by cuts in other areas. This freeze did not apply to demand-driven government expenditure such as health and education, benefits and pensions. The government said that core programmes would be maintained while ‘poor quality’ spending would be cut across the board. For example, small but politically significant cuts were made in the area of the training incentive allowances for beneficiaries, and community education night classes. The government was fixed on avoiding an international credit rating downgrade – a goal that it achieved. Total government spending reached NZ$65 billion during 2009, and was expected to rise by about NZ$3 billion each year. The government was borrowing about NZ$1 billion per month to cover its shortfall. Such borrowing was expected to double government debt by 2014 to NZ$40 billion.

Despite the Government’s cautious and moderate ideological nature, it was surprisingly active during its first year. Parliament passed 70 government bills during 2009, which it went frequently into urgency (an accelerated legislative procedure) to do. Some small changes started to be made in the public sector. For example, big investments were launched in infrastructural programmes to improve roads and the national electricity grid, and to create an ultra-high speed broadband network.

New Zealand’s unique and comprehensive state injury insurance scheme – the Accident Compensation Corporation (ACC) – began to be significantly reformed by the new government. The new ACC Minister Nick Smith claimed the insurer was in crisis and faced insolvency. Apparently ACC’s costs had doubled since 2000. Debate occurred about whether the government was scaremongering and ‘over-egging the pudding’ about the severity of the situation in order to push through an ideologically driven reform agenda. The government sought to cut the ACC’s expenditure by NZ$2 billion through axing some entitlements and making others more difficult to access. In addition, the levies that the public pays to fund the service were also increased significantly. The initial rises that were proposed led to widespread protests – especially by motorcyclists – and the government eventually agreed to lower levy increases.

In the health portfolio, Minister Tony Ryall managed to push through plans to restructure the bureaucracy, purportedly producing savings of NZ$700 million and 500 job losses. Significantly there was little opposition to the plans. This reflected National’s wider public sector reform plans that concentrated on the goal of shifting resources ‘from the back office to the front line’. Across the public service the government also put a cap on employment numbers, which in reality actually led to job reductions. Under the previous Labour-led government, the public service had grown by about 40 per cent.

Social issues

With the government taking a relatively non-controversial and moderate approach to economic issues in 2009, social issues were the main arena for political debate. One of the most contentious social issues of recent years has been the question of child discipline laws – especially after the Parliament passed an amendment to the Crimes Act that removed discipline as a defence for assault against children (Edwards 2008: 1083). Essentially the law banned smacking for the purposes of correction, with discretion given to police to determine whether prosecution is warranted. Many saw the law as amounting to undue state interference in family life. This led to a citizen-initiated referendum being held as a postal ballot over a three-week period beginning on 30 July. The referendum asked what many thought was a confusing and loaded question: ‘Should a smack as part of good parental correction be a criminal offence in New Zealand?’ The non-binding referendum had a voter turnout of 56 per cent, of which 88 per cent voted against the question (i.e., against the so-called ‘anti-smacking law’) and 12 per cent voted in favour. Despite the overwhelming result, the government refused to overturn the unpopular legislation and instead brought forward a promised review of the law. The subsequent review was interpreted as favouring the law, especially because it found no evidence that police or welfare staff were using it inappropriately. It was a relatively rare example of the Key Government going against public opinion.

Law and order was one of the areas in which the government was most active during 2009, especially in terms of its legislative agenda. The Minister of Justice, Simon Power, pushed a long list of socially conservative and popular measures through Parliament, including major bills covering criminal investigations, organised crime, sentencing, domestic violence and a new law that gives courts the power to crush the cars of recidivist vehicle offenders. Similarly, Judith Collins was a popular Minister of Police and Corrections, noted for her ‘no-nonsense’ approach.

In March, the Prime Minister announced that the government was going to restore the honorific titles of Knights and Dames to the New Zealand Royal Honours system, which bestows orders, decorations and medals on its most honoured citizens. These titles had been removed by the previous Labour-led government in 2000.

The environment continued to be a salient political issue – particularly climate change. The outgoing Labour Government passed into law an emissions trading scheme during the dying days of its term in office in 2008. This ambitious attempt to establish a market for carbon exchange attempted to bring all economic sectors – including agriculture – into a regime to reduce greenhouse gas emissions. The new National Government then sought to modify the scheme, making it easier on business and producing smaller energy and petrol price increases. National had difficulty obtaining a bipartisan agreement with Labour over the changes, and eventually relied on the votes of the Maori Party to pass the legislation in November, with controversial tradeoffs given to the Maori Party’s tribal support base. The government also succeeded in ‘streamlining’ the Resource Management Act – New Zealand’s principal legislation for environmental management.

Local government reform in the city of Auckland (New Zealand’s largest city, with 1.4 million residents and 31 per cent of the country’s population) was progressed throughout 2009, with plans to merge the eight local authorities of the city into what was branded ‘Auckland super city’. The previous Labour-led government had set this process in motion by establishing the Royal Commission on Auckland Governance in 2007, which finally reported in 2009, after the change in government. The National Government accepted the main recommendation to merge the various authorities into a unitary authority with a single mayor, but controversially rejected a number of proposals – notably the plan to set aside a number of seats on the new council for Maori representatives.

Numerous issues of ethnicity permeated politics throughout the year, most of which were astutely handled by the National Government. As part of its support agreement with the Maori Party, National commissioned a ministerial inquiry into the Foreshore and Seabed Act 2004, which had been passed by the previous Labour Government. This highly contentious legislation had actually led to the creation of the Maori Party, which regarded it as a ‘colonial land grab’ because it effectively nationalised parts of the coastline that some indigenous people wanted to seek ownership of through the courts. The inquiry – which was widely regarded as being stacked in order to provide the outcome – released its 160-page report in July calling for the repeal of the law. This left the government with the difficult job of deciding how it might repeal the law without creating significant dissatisfaction on this polarised and emotional issue.

Another significant win for the Maori Party was the National Government’s decision to allow a Maori flag to be hoisted alongside the national flag on government property on the public holiday of Waitangi Day. The Prime Minister announced that he was happy to permit it, believing that it would symbolise the progress of the state–Maori partnership. The particular flag chosen was the Maori Tino Rangatiratanga (Maori sovereignty) flag, which apparently had the vast support of Maoridom. There was some discontent, especially because the flag was associated with radical Maori nationalism and because it was also a symbol utilised by the Maori Party.

The government had to deal with a fraught issue of whether to change the spelling of one of New Zealand’s cities, Wanganui, after the state geographic board came to the conclusion that the city’s Maori-derived name had been erroneously misspelled for over 150 years. The board recommended to the government that an ‘h’ be added to the city’s name (making it ‘Whanganui’), which conflicted with the opinion of a significant majority of the city’s residents. National took three months to consider the issue, and in typical form managed to come up with a compromise solution, announced in December, whereby both spellings would be acceptable, although all central government agencies would use the ‘new’ spelling that included the ‘h’.

The state-owned public broadcaster, Maori TV, was involved in controversy when it bid – with support from the Maori Party’s Minister of Maori Affairs – for the broadcasting rights for the Rugby World Cup, scheduled to be held in New Zealand during 2011. A debacle occurred over the process, involving disputes between National and its support parties, and competing bids from different state broadcasters. Eventually a compromise was developed that would see key games being broadcast simultaneously on a mix of six different channels.

Political finance scandals

Issues of political finance have become particularly controversial in recent years, and 2009 was no different. The political earthquake of the British parliamentary expenses scandal sent shockwaves all the way to New Zealand, and, in response to the British scandal, questions were asked as to whether New Zealand’s own equally secret political financing and MP remuneration arrangements might also be concealing outrageous and extravagant spending. New Zealand’s Parliament is exempt from the Official Information Act, which means that there is very little transparency, but this was partially reversed when Parliament’s Speaker – with the encouragement of Prime Minister John Key – implemented a new regime whereby some limited information about MPs’ spending would be released on a quarterly basis.

Numerous mini-scandals soon resulted from the increased focus on members’ perks. The most serious involved the Minister of Finance, Bill English, who was found to be in receipt of a housing allowance to which he was not entitled. English had listed his ‘primary residence’ as being in the distant small town of Dipton, Southland, despite his family living in the capital, Wellington, in his own family property for which he charged the taxpayer NZ$900 a week. When the situation was exposed, the negative publicity forced the Finance Minister to repay what he had received; an investigation by the Auditor-General found that English was not entitled to the allowance, but that the fault was not entirely his own.

Politicians’ travel expenditure became a particular focus of concern. Prime Minister Key issued an informal ban on his ministers using government funding to take spouses on overseas work trips. Then the leader of the Act Party, Rodney Hide, who was a minister outside of Cabinet, was exposed as having taken his girlfriend on junkets to Britain, Hawaii, the United States and Canada. It appeared incredibly hypocritical because it seemed to go against Hide’s high-profile campaigning against such activity. In fact, his party’s whole reputation and narrative has been built up on the idea of opposition to excessive government expenditure and waste, and with one serious judgement of error, Act’s strong brand was severely tainted. Hide also caused embarrassment when he was reported as making injudicious comments about his National allies to party supporters. Amongst his unguarded remarks was the statement that the Prime Minister ‘doesn’t do anything’ and that Hide was able to slip anything past his National colleagues.

Other scandals

Another parliamentary spending scandal morphed into something bigger when a Maori politician controversially ‘played the race card’ to justify his personal exploitation of the perks of his job. The Maori Party renegade MP Hone Harawira was exposed as having departed from a parliamentary trip to Brussels in order to sightsee in Paris with his wife. When a party supporter emailed asking for an explanation, Harawira responded infamously to say: ‘Gee Buddy, do you believe that white man’s bullshit too? White motherf-. . . ers have been raping our lands and ripping us off for centuries and all of a sudden you want me to play along with their puritanical bullshit.’ Much of the country was outraged with both Harawira’s lack of contriteness, his expletive filled communication and his self-justifying use of race for personal gain. His own party also severely rebuked him, and the leadership proposed he leave the Maori Party. A power struggle occurred, but Harawira stood his ground and eventually the rift was healed.

The other major political scandal of the year regarded the personal life of a government minister, Richard Worth, who held numerous portfolios including Internal Affairs and Land Information, but was a minister outside of cabinet. Worth resigned his ministerial warrants on 2 June after the Prime Minister said he no longer had confidence in him, and just over a week later he also resigned from Parliament. Although full details were never made public, the junior minister had been involved in a complicated relationship with two separate women, the first of whom made allegations to the police of sexual assault, which did not lead to any charges. The second involved a Labour Party activist who claimed to have received inappropriate sexual texts and phone calls. Earlier in the year, Worth had also been reprimanded by the Prime Minister for his role in a private business trip to India. His ministerial roles were eventually taken over by another National MP, Nathan Guy, who was promoted to being a minister outside of cabinet. Being a list MP, Worth’s resignation from Parliament meant that he was replaced by the next eligible person on National’s 2008 list: Cam Calder.

National’s allies

Trouble in government coalition and support parties has become a theme through New Zealand’s mixed-member proportional representation (MMP) history (which has been used since 1996). Yet despite occasional ructions, National managed relatively smooth relations with its support partners Act, the Maori Party and United Future. Although technically a single-party minority government, National’s administration could normally rely on a comfortable 68-vote in the 122-member Parliament. Furthermore, in 2009, National negotiated a cooperation agreement with the Green Party, meaning that the administration became the most broad-based government thus far under MMP.

Throughout 2009 the support parties were relatively compliant with National, only occasionally flexing their muscles – normally over relatively symbolic issues rather than deal-breaking matters. For example, co-leader of the Maori Party, Pita Sharples, announced without regard for proper process that the government would ratify the UN Declaration on the Rights of Indigenous People – a treaty that the previous Labour-led government had refused to sign. It was left to the other co-leader, Tariana Turia, to quietly build the relationship with National. Consequently, the Maori Party ended the year with some significant policy trophies for its supporters.

The Act Party was less obviously successful in 2009, and the internal tensions inherent in its cooperation with a moderate centre-right government were much more evident. Leader Rodney Hide had a busy year with his role as Minister of Local Government responsible for the Auckland ‘super city’ amalgamation. However, some in his party saw him as overly compliant with National, and soon after his political finance travel scandal, it was reported that he faced an abortive leadership coup by deputy leader Heather Roy and maverick party founder Roger Douglas. Hide apparently faced the plotters down with the help of the Prime Minister, but the episode indicated the serious strains within the party. The other support partner, United Future, was barely visible, and speculation continued about the party’s longer-term existence.

Other political parties

The third largest party in Parliament – the Green Party – negotiated a closer relationship with National, but retained its independence in Parliament. Its ‘memorandum of understanding’ with the governing party was a relatively restricted agreement and mainly pertained to policy development in the energy area, together with the rollout of a home insulation programme. Apart from this, the Greens had a difficult year of transition in 2009. Early in the year, Green co-leader Jeanette Fitzsimons announced that she was standing aside after nearly two decades leading the party. The party’s constitution requires a gender balance between the two co-leaders, and a vigorous contest took place between Metiria Turei – a relatively young Maori MP – and Sue Bradford – a veteran left-wing activist and MP. Turei easily won the contest, leading the more high-profile Bradford to soon announce her resignation from Parliament. The Greens thus not only lost one of their most effective MPs, but also their most left-wing voice and champion of unemployment, youth and beneficiary rights, and general social issues. These changes reflected the shifting ideological and strategic nature of the environmental party. Increasingly, a significant faction of the party wanted less emphasis placed on left-wing and social issues, with the goal of transforming it into a purer environmental party that would be more flexible in its political relationships, and thus potentially more successful.

The year 2009 was the first in a decade that the Labour Party was out of office, and it struggled with re-inventing itself after its defeat. Although the party was in transition to the next generation – with a very able intake of recent MPs – the leadership was still in the hands of a much older generation. So despite wanting to regenerate and appear fresh and distinctive from the party that had just left government, it was now lead by Phil Goff, who had been in Parliament for well over two decades, most of which he had been a senior member of the caucus. And even with this experience and prior profile, Goff struggled in 2009 to get noticed. His ratings as preferred prime minister remained in the single figures, causing ongoing leadership speculation, despite the lack of any apparent challenger. The most likely contenders remained Shane Jones and David Cunliffe. Other rising stars in the party included David Parker, Charles Chauvel, Phil Twyford and first-term MPs Grant Robertson and Jacinda Ardern [pictured above].

Meanwhile, the former party leader and prime minister, Helen Clark, was appointed to a top position in the UN, creating a by-election in her safe seat of Mt Albert. Phil Goff’s hand-picked candidate, David Shearer, won the contest easily, with National’s candidate Melissa Lee putting up a poor performance. Also, former Labour deputy leader Michael Cullen resigned from his list position in Parliament, leading to Damien O’Connor returning.

Part of Labour’s popularity problem was the moderate nature of the government in 2009. Labour had pinned its hopes on painting the Key administration as a new right ‘wolf in sheep’s clothing’. Another problem was that many voters still associated Labour with some of its more unpopular stances from its time in government – especially those that were classed as liberal ‘nanny-state’ measures. Under Goff, the party made small attempts to shake off this image and return to a more class-oriented approach. In particular, Goff managed to make one impression with a ‘nationhood’ speech in which he strongly criticised National’s improving relationship with the Maori Party, and that party’s deal to gain concessions for its support base in exchange for helping pass National’s Emission Trading Scheme. This, together with positioning Labour to oppose the government’s planned repeal of the Foreshore and Seabed Act, divided Goff’s own caucus.

The other party in Parliament – the Progressives, led by veteran MP Jim Anderton – began moves that were widely seen as winding up this one-MP party. Anderton struck a deal with the Labour Party whereby ‘joint membership’ would be allowed in both parties, which effectively melded the Progressives back into the party from which Anderton had acrimoniously split in 1989. Speculation mounted about an announcement of his imminent retirement.

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BRYCE EDWARDS

Department of Politics, University of Otago, New Zealand

European Journal of Political Research 49: 1102–1112, 2010

Sources and further information

Publications:

Edwards, B. (2008). New Zealand. European Journal of Political Research 47(7–8): 1079–1088.

Edwards, B. (2009). New Zealand. European Journal of Political Research 48(7–8): 1052–1066.

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Review of New Zealand politics in 2009

The year 2009 was a hectic one in New Zealand politics, partly because it was the first year of the new National Party Government’s term in office. At a general election in November of the previous year, National had ousted the Labour Party from its three-term tenure in office and formed a single-party minority government with support agreements with the Act Party, the Maori Party and United Future – all of whom gained ministerial roles outside the cabinet. In this first year, the new administration was both ideologically centrist and highly popular, being challenged only on difficult issues relating to the economic recession, political finance controversies over MPs’ expenses and various race relations questions. The following blog post examines these issues via a ‘Review of New Zealand politics in 2009’ which has just been published as a peer-reviewed journal article in the top political science periodical, the European Journal of Political Research (in the December 2010 edition). As well as looking at how the National Government fared in 2009, it also briefly analyses the main issues in politics (such as the economy, social issues, political finance scandals) and the changes in the other parliamentary political parties. [Read more below]